Event: when the company released its semi-annual report for 2022, 2022H1 achieved revenue of 2.118 billion, an increase of 77.35% over the same period last year, and its net profit reached 140 million, an increase of 30.64% over the same period last year.

Actively adjust the customer structure, the construction of overseas bases is smooth, and there is plenty of room for capacity growth. The company performed well in terms of revenue and profit in the first half of the year, with operating revenue of 2.118 billion, an increase of 77.35% over the same period last year, while net profit of 140 million, an increase of 30.64% over the same period last year. Under the background that the international trade situation has brought many uncertain factors to the electronics industry, the company has returned to the growth track, got rid of the previous impact on the business of major customers, and realized the business expansion to other customers. At the same time, the company is actively laying out in India and other overseas countries, building new manufacturing bases in Vietnam and Bangladesh. In addition, the comprehensive production of Huizhou Phase II production base also provides the company with stable production capacity growth.

Profitability is basically stable, increase investment in research and development to build an intelligent manufacturing platform. The company's 2022H1 gross profit margin reached 19.63%, down 3.04% from the same period last year; the net profit margin reached 6.62%, down 2.36% from the same period last year. Among the expenses during the period, the equity incentive fee increased by 10.1023 million yuan compared with the same period last year. The company invested about 58.5034 million yuan in R & D in the first half of 2022, an increase of 17% compared with the same period last year, and the R & D expenditure rate reached 2.76%. The company actively cooperates with professional scientific research institutes at home and abroad, continuously improve the level of technology with the help of external advantages, and introduce high-precision POP technology. The company continues to make efforts in the upgrading of production process, the renewal of production equipment and the research and development of engineering technology, with sufficient driving force for subsequent growth.

With consumer electronics as the cornerstone, automotive electronics and new energy are growing widely. At present, in terms of consumer electronics, consumer promotions such as Singles Day and Black five in the second half of the year are expected to stimulate the market to pick up. New brand models will be released around September and October, and consumer electronics orders are expected to increase. In addition, the company's overseas plants in Vietnam and Bangladesh are expected to contribute substantial profits as capacity is gradually released. In terms of automotive electronics, the company entered Valeo's supply chain last year and officially produced and shipped in March this year, which will continue to generate revenue for the company. At the same time, the company is also in the layout of new energy, the introduction of industry customers such as Yu Neng technology and so on. According to the information released by the company's official account, the company's first batch of micro inverters for Yuneng OEM was delivered in August. It is expected that the products of micro inverters will gradually expand in the second half of the year, and the growth rate next year is still relatively optimistic. On the whole, the company's revenue growth in non-consumer electronics is expected to increase in the future, and the proportion of revenue in the overall revenue is expected to increase gradually.

Investment suggestion: the 22-24 year net profit of the company is estimated to be RMB 386, 450, 000, 000, We believe that the company's consumer electronics business has successfully completed the introduction of new key customers, the new Huizhou Phase II new base can reach production, and the layout of overseas factories will provide sufficient capacity guarantee for business growth. If consumer electronics demand picks up in the future, the company is expected to benefit directly. In addition, the company actively layout automotive electronics, new energy business, the introduction of micro inverter industry major customers, the income structure is expected to blossom more. Maintain a "buy" rating.

Risk tips: mobile phones and other terminal demand is lower than expected, EMS industry competition aggravates the risk, the company's downstream customer market share decreases, fund-raising project progress is not as expected.